Rightmove’s legacy is on the “brink of demise”, a new note to investors from a bank has said.
Jefferies has set Rightmove’s share price target at 500p, well under its current 620p.
It said that its rating is not about competition but “the breakdown of a relationship”.
It goes on: “Rightmove long ago departed its agency-backed agency roots, leveraged its first-mover status, drove the wave of secular migration to digital marketing and has built what is today a massive lead on user traffic.
“This huge gravitational pull has kept UK estate agents in an orbit of inexorable price rises that long ago outstripped any increased functionality of the platform.
“This schism is now being exposed.”
The report by Jefferies, which initiates its coverage of Rightmove, to investors says that it sees a high risk of sustained agency churn.
It says: “It is really only the agent’s fear of losing an instruction from not being on Rightmove that holds back the churn.
“The greatest threat to Rightmove is therefore collective action across the estate agency industry to communally break free of what has been described as ‘an abusive relationship’.”
The report says that protesting agents could move to OnTheMarket or Zoopla, “despite their shortcomings”.
The Jefferies report forecasts that the number of agency branches subscribing to Rightmove will drop to just under 16,000 (15,978) in 2022, down from a high of 17,626 in 2017.
The report also says that Rightmove helps save agents money on a number of routine tasks and that the consumer experience of Rightmove is “undoubtedly excellent”.
Jefferies also looks at two new competitors, Rummage4Property, and PropertyMutual, commenting that “disrupting an incumbent portal is very hard”, but says that conditions are “ripe” for existing competitors Zoopla and OnTheMarket.
It says that so far OnTheMarket has had mixed success and still “not made a big dent in Rightmove’s and Zoopla’s supremacy”.
Of Zoopla, the report says that new owners Silver Lake have given the management team a “freer hand to set and execute on strategy”: however, there is still a “massive gap” between Zoopla and Rightmove.
Jefferies has previously advised Zoopla.